Glossary · Reading the business
Operating Company
In short
This is the active business entity that conducts day-to-day operations, generates revenue, and employs staff. It's the core business you intend to acquire.
What it means in a deal
Most SBA 7(a) acquisitions focus on buying the operating company. If there's a separate Real Estate Holding Company, you'll need to understand the relationship and how both entities will be acquired or leased. Ensure the operating company has a strong, identifiable asset base for collateral.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Operating Company
- What happens if my business real estate is owned separately from my operating company?
- What happens if the business real estate is held in a separate entity owned by the buyer, not the operating company?
- If the business real estate is in a separate entity, what documentation is needed to link it to the operating company?
- Are business life insurance premiums generally tax deductible for the company?
- Can an SBA 7(a) loan help me acquire another company?
- What distinguishes a company redemption from a cross-purchase buyout for SBA?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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